Confidence among small firms in the South West "has fallen once again", according to the latest quarterly report from the Federation of Small Businesses (FSB).

The region's confidence is now significantly below the national average reflecting, said the FSB, "a level of SME pessimism among members not seen since the aftermath of the financial crash".

The figures reveal that in the South West region almost half - 46 per cent - of small businesses expect their performance to worsen over the coming three months with fears with the uncertainty over Brexit having an impact on views about trade and investment.

Of the South West members who took part in the survey, 70 per cent do not expect to increase capital investment in the coming three months - with 17 per cent of them planning to actively decrease investment.

Skills also remains a local worry with the number of small firms in the South West region citing lack of access to appropriately skilled staff as a barrier to growth having risen to over a third.

Russell Warner, FSB area lead for Gloucestershire, said: "These are many different views about Brexit but what these figures indicate is that all this debate and uncertainty is having a marked influence on the way many of our businesses are looking at themselves and their future.

"Here in Gloucestershire, as elsewhere, small businesses are the driving force of this economy but it is hard for them to plan ahead and feel confident about investment and growth if there is a lack of stability in business terms.

"What is worrying also is that the South West usually bucks the trend and is markedly more confident than other part of the country - these figures show that this is no longer the case and something has changed.".

Mike Cherry, the FSB's national chairman, said that the sooner the Brexit negotiations and debate can be concluded the quicker politicians can concentrate on other issues that can affect business confidence.

"As things stand, Brexit is absorbing all of the UK's political bandwidth. Once resolved, we must get back to issues on the domestic agenda: a late payment crisis that destroys 50,000 firms a year, an outdated business rates system and spiralling employment costs."

On the plus side, the FSB report shows that nationally, small businesses are continuing to hire new personnel, with more than one in six taking on a member of staff in the past three months.

Nearly seven in 10 have also increased pay compared to last year, significantly more than in the same period in 2017.

Mike Cherry added: "These figures are testament to the resilience and grit of small business owners' right across the UK. They're still hiring, increasing wages and aspiring to grow. All is certainly not lost. There is a huge amount of drive and ambition among our small businesses. If they're given certainty and the support they need, their full potential can be realised."